Too early for Saudis to declare victory over shale: Analyst

It is way too early for Saudi Arabia to be declaring victory over U.S. shale producers, analyst John Kilduff said Thursday.

While the number of rigs operating is down more than 50 percent, oil production in the U.S. actually upticked last week, he told CNBC's "Power Lunch."

"It's hovering still near our multidecade highs. It shows they've been driven to a point of efficiency that none of us thought was quite possible with the shale producers," said Kilduff, founding partner with Again Capital and a CNBC analyst.

"They are now making these wells in less time than they ever did before, getting more oil and gas out of them than ever before, with less folks on the ground doing it."

In other words, Saudi Arabia should be careful what it wishes for, he said.

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A worker stands at a pipeline, watching a flare stack at the Saudi Aramco oil field complex facilities at Shaybah in the Rub' al Khali ('empty quarter') desert in Shaybah, Saudi Arabia.

"There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil, including U.S. shale, deep offshore and heavy oils," a Saudi official told the newspaper.

"There's no doubt that we've seen debt levels balloon up over the last several months as oil prices had made their way down. So certainly the balance sheets are modestly impaired compared to what they used to be at $90 to $100 oil," he told "Power Lunch."

"I believe that you'll see these companies continue to grind out efficiency gains and be able to execute on their business plans to the extent that we see oil prices modestly higher over the next year," said Mariani.

However, if Saudi Arabia decides to increase production, he believes there will be continued modest pressure on oil prices.